APGA weighs in on energy prices

The Australian Pipeline and Gas Association (APGA) has raised concerns about the Federal Government’s focus on energy prices as the sole driver of new policy, stating that this poses the risk of undermining the value of gas market reforms.

Speaking at the South East Asia Australia Offshore and Onshore Conference 2018 (SEAAOC) in Darwin, APGA Chief Executive Officer, Steve Davies, said some of the reforms, which had been developed after extensive analysis and consultation, had already been implemented, with others on the way.

“These major reforms to information disclosure and in arbitration make sure that customers can have confidence that the tariffs they pay to transport gas are reasonable,” Mr Davies said.

“These are complex reforms to improve market outcomes, liquidity, flexibility and competition in gas transportation markets. The CoAG Energy Council’s Gas Market Reform Group and the Australian Energy Market Operator have worked with industry over almost two years developing and delivering them.

“And yet, they seem to be of scant importance to the government now because they are not easily translated into a price reduction, which seems to be the only measure by which reform is judged.”

The cost of gas transportation is just seven per cent of the cost of gas for residential users, and hasn’t increased in real terms for more than a decade.

“There’s not a lot of reduction to be had,” Mr Davies said.

“Energy policy is complex. Focusing on one element, in this case price, will never result in the multifaceted, interconnected policy required to restore confidence for energy investors and users.”